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Tuesday, 06 September 11
INDONESIAS PROPOSED COAL EXPORT BAN MAY HAVE IMPACT ON THE INDIAN POWER SECTOR - DIPESH DIPU
.jpg) COALspot.com - This is a special interview about Indonesian proposed coal export ban by 2014, with Mr. Dipesh Dipu, Director of Deloitte Touche Tohmatsu, India.
The Indonesian government is currently in the process of drafting a new regulation that could ban the export of low-grade coal by January 12, 2014. This is likely to apply to coal below 5700 kcal/kg on air dried basis in value.
As of now Indonesia is producing around 150 million tons of coal with calorific value below 5700 GAD (according to chairman of Indonesian coal mining association). However by 2014, there are possibilities the total production of below 5700 GAD coal may reach more than 200 million per annum.
Will Indonesian coal export ban impact on the Indian fuel requirements?
The earlier grade of coal that was being considered for proposed ban has GCV of 5100 kcal/kg of less (adb), which can be comparable to 3800-4200 kcal/kg (arb) domestic coal available in India. This grade of coal has found favor in India primarily due to likely price advantage but economics of power generation based on such grade of imported coal may be a suspect. This considering that such grades of coal from Indonesia typically have high moisture content, which makes transportation cost per unit of energy generated higher. The quantum of the low grade of coal (<5100 kcal/kg adb) procured from Indonesia is likely to remain relatively low.
However, if the new definition of low grade coal is applied (<5700 kcal/kg adb), it may be reasonable to believe that such a ban may have impact on the Indian power sector as volumes in this grade of coal are expected to rise in the proportion of coal exports to India. Several of the acquisitions made by Indian power generation companies in Indonesia have been in coal blocks that will produce coal of this grade, and a blanket ban on the exports can jeopardize power plant development in India.
On the other hand, the domestic Indonesian market may not be prepared to consume all the coal mined of this grade in view of the power generation capacity addition plans in Indonesia. In such a case, the coal mine development is likely to be deferred. The Indonesian law makers may need to reconsider domestic market demand, investment climate in coal sector and impact of the legislation on the export revenues.
What is the alternative source for Indian power industry if the proposed coal export ban come into effect by 2014?
Indian power generation companies have been forced to look out for coal assets abroad due to the investment and regulatory environment within the country. India boasts of more than 110 billion tonnes of coal reserves, which largely fall within a 300 meters of depth. If the regulatory and investment environment is amended to allow greater participation of private sector Indian dependence on imports will be reduced.
However, for imports, India will continue to look at Indonesia, South Africa, Australia and newer destinations like Mozambique and Columbia. But these sources also have constraints, domestic demands in South Africa is likely to restrict quantum jump in exports out of South Africa. Indonesia has also proposed domestic market obligations. Mozambique may have infrastructure constraints for large volumes of coal being transported from Tete province to ports of Maputo, Ncala or Beira. Australian coal is of high quality but may have higher costs of mining and transport.
What would be the additional cost if Indian consumers switch their sourcing origin from Indonesia?
Indonesia has competitive advantage due to its geographical closeness. However, on a per tonne basis, assuming comparable quality, costs of transport may make marginal difference when compared with South Africa and Mozambique.
When compared to Australian coal, due to the high quality, cost of energy may well be comparable even though shipping costs are higher. Between Indonesian coal (5500 kcal/kg adb priced at USD 90 per tonne) and Australian coal (6500 kcal/kg adb priced at USD 120 per tonne), indicative variable cost difference of power generation may be about Indian Rupees 0.20 to 0.30 per kWh (electricity unit) in favor of Indonesian coal.
Will it affect Indian economy growth or this coal export ban is ignorable as India can easily identify alternative sources of fuel?
The magnitude of growth in power generation in India will necessarily mean that coal will remain the mainstay. Natural gas has had issues of availability. Nuclear plant development is facing socio-political challenge in view of the risks of technology failure. Development of hydel power has also faced issues of land acquisition, rehabilitation & resettlement apart from the technical issues of hydro-geological features. Renewable sources such as solar and wind generation are still projected to constitute a small portion of India power generation mix. Identifying an alternative source that can match coal in its accessibility, availability and affordability in the context of scale of capacity addition required in India is a challenge.
What is the Indian government's role on this issue, whether government has to come out with the solution such as easing Indian mining and environment law, open up mining for foreigners, G2G arrangement, etc…?
There is a need to look at domestic sources with pro-active and constructive approach and make all necessary legal and statutory amendments that make the resources available and mineable. Easing the regulations may not be one of such measures but making those regulations work in sync with each other in a time bound and predictable manner must certainly be.
There is certainly a case for opening the domestic coal sector for private participation, including independent miners, and for foreign participation so that newer technology and enhanced scale of operations are implemented in India. The regulation also needs to permit risk capital to come in for prospecting and exploration.
For imports the G2G relations can be leveraged to secure coal assets. India has good relationship with Indonesia and has also signed a tax treaty with Mozambique in 2010 which will facilitate investments. Government may also engage with these countries to ease exports to India and extend fiscal support to coal mining companies investing in mining and associated infrastructure development.
About Dipesh Dipu
Dipesh Dipu works as Director with Deloitte Touche Tohmatsu India Pvt. Ltd in the Energy and Resources consulting practice of the firm and anchors the Firm’s initiative in the mining and metals sectors.
He is a mining engineering graduate from Indian School of Mines and is a Chartered Financial Analyst (CFA). He has also done executive program in business management from Indian Institute of Management Calcutta. Dipesh has recently been awarded the Abheraj Baldota Gold Medal for the Young Mining Engineer of the Year 2007 by the Mining Engineers’ Association of India in recognition of his contributions in the improvement of mining industry in India.
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Thursday, 13 September 18
SUPRAMAX: INDO-INDIA COAL RUN WAS FIXED CLOSE TO $16000 ON ULTRA - FEARNLEYS
Capesize
Rates took a further drop in the beginning of the week, to later find a floor around mid-week reaching mid USD 7 level for c5 and just ...
Thursday, 13 September 18
SHIPPING IS INCREASINGLY CAUGHT IN THE TRADE WAR LINE OF CROSSFIRE - PETER SAND
Once again, the already long list of tariffed goods has been made even longer. Many more commodities were hit on 23 August, but September is likely ...
Wednesday, 12 September 18
THE INTERRELATIONSHIP BETWEEN LETTERS OF INDEMNITY AND CHARTERPARTY "TIME BAR" PROVISIONS - STANDARD CLUB
KNOWLEDGE TO ELEVATE
Introduction
A recent English Court of Appeal decision provides important guidance on the applicability of charterpar ...
Wednesday, 12 September 18
IS LNG POISED FOR A NEW GROWTH CYCLE? - WOOD MACKENZIE
Gas needs to work for its long-term sustainability. But the mood music is upbeat. Just 18 months ago the LNG market was depressed, anticipating an ...
Wednesday, 12 September 18
U.S. TOTAL COAL EXPORTS TO BE 107 MMST IN 2018 AND 101 MMST IN 2019 - EIA
EIA forecasts U.S. coal production will decline by 1% to 768 million short tons (MMst) in 2018, despite a 10% (10 MMst) increase in coal exports.
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- Kalimantan Lumbung Energi - Indonesia
- Sindya Power Generating Company Private Ltd
- Gujarat Sidhee Cement - India
- Jindal Steel & Power Ltd - India
- Indonesian Coal Mining Association
- Indian Energy Exchange, India
- Riau Bara Harum - Indonesia
- Oldendorff Carriers - Singapore
- Ministry of Mines - Canada
- Leighton Contractors Pty Ltd - Australia
- Merrill Lynch Commodities Europe
- Kumho Petrochemical, South Korea
- Central Electricity Authority - India
- Bangladesh Power Developement Board
- Medco Energi Mining Internasional
- Coastal Gujarat Power Limited - India
- Star Paper Mills Limited - India
- Thiess Contractors Indonesia
- Edison Trading Spa - Italy
- Ambuja Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- Larsen & Toubro Limited - India
- Wood Mackenzie - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Petron Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- McConnell Dowell - Australia
- MS Steel International - UAE
- Attock Cement Pakistan Limited
- Ministry of Finance - Indonesia
- Coalindo Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Madhucon Powers Ltd - India
- Interocean Group of Companies - India
- Standard Chartered Bank - UAE
- Kohat Cement Company Ltd. - Pakistan
- Chamber of Mines of South Africa
- AsiaOL BioFuels Corp., Philippines
- PowerSource Philippines DevCo
- Maharashtra Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- VISA Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Kepco SPC Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indika Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Xindia Steels Limited - India
- Bukit Makmur.PT - Indonesia
- Energy Development Corp, Philippines
- Semirara Mining Corp, Philippines
- LBH Netherlands Bv - Netherlands
- SMG Consultants - Indonesia
- Global Green Power PLC Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Mintek Dendrill Indonesia
- Eastern Energy - Thailand
- Orica Mining Services - Indonesia
- Deloitte Consulting - India
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement - Thailand
- Australian Commodity Traders Exchange
- CNBM International Corporation - China
- Bukit Baiduri Energy - Indonesia
- Altura Mining Limited, Indonesia
- Kobexindo Tractors - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Singapore Mercantile Exchange
- Essar Steel Hazira Ltd - India
- Tata Chemicals Ltd - India
- Savvy Resources Ltd - HongKong
- Jaiprakash Power Ventures ltd
- White Energy Company Limited
- Chettinad Cement Corporation Ltd - India
- Tamil Nadu electricity Board
- The University of Queensland
- Price Waterhouse Coopers - Russia
- Meenaskhi Energy Private Limited - India
- Port Waratah Coal Services - Australia
- Ministry of Transport, Egypt
- Globalindo Alam Lestari - Indonesia
- London Commodity Brokers - England
- GVK Power & Infra Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Lanco Infratech Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Videocon Industries ltd - India
- GAC Shipping (India) Pvt Ltd
- Parliament of New Zealand
- Rio Tinto Coal - Australia
- Semirara Mining and Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Latin American Coal - Colombia
- Kideco Jaya Agung - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- Eastern Coal Council - USA
- Manunggal Multi Energi - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Indian Oil Corporation Limited
- Antam Resourcindo - Indonesia
- Siam City Cement PLC, Thailand
- PNOC Exploration Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- IHS Mccloskey Coal Group - USA
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parry Sugars Refinery, India
- Timah Investasi Mineral - Indoneisa
- ICICI Bank Limited - India
- Bulk Trading Sa - Switzerland
- SMC Global Power, Philippines
- Electricity Authority, New Zealand
- Baramulti Group, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- South Luzon Thermal Energy Corporation
- International Coal Ventures Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Minerals Council of Australia
- Economic Council, Georgia
- Cement Manufacturers Association - India
- India Bulls Power Limited - India
- Bharathi Cement Corporation - India
- Independent Power Producers Association of India
- Sojitz Corporation - Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- IEA Clean Coal Centre - UK
- Mjunction Services Limited - India
- Aboitiz Power Corporation - Philippines
- Georgia Ports Authority, United States
- Banpu Public Company Limited - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Heidelberg Cement - Germany
- Africa Commodities Group - South Africa
- PTC India Limited - India
- Commonwealth Bank - Australia
- Bhushan Steel Limited - India
- Karaikal Port Pvt Ltd - India
- Wilmar Investment Holdings
- Bukit Asam (Persero) Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- The Treasury - Australian Government
- Australian Coal Association
- Ceylon Electricity Board - Sri Lanka
- Dalmia Cement Bharat India
- Anglo American - United Kingdom
- Thai Mozambique Logistica
- Carbofer General Trading SA - India
- Romanian Commodities Exchange
- Goldman Sachs - Singapore
- Aditya Birla Group - India
- Sakthi Sugars Limited - India
- GMR Energy Limited - India
- Barasentosa Lestari - Indonesia
- Uttam Galva Steels Limited - India
- Orica Australia Pty. Ltd.
- Marubeni Corporation - India
- Cigading International Bulk Terminal - Indonesia
- CIMB Investment Bank - Malaysia
- Miang Besar Coal Terminal - Indonesia
- Sical Logistics Limited - India
- ASAPP Information Group - India
- Indogreen Group - Indonesia
- Therma Luzon, Inc, Philippines
- Mercuria Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kartika Selabumi Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Planning Commission, India
- Vijayanagar Sugar Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Bhatia International Limited - India
- Rashtriya Ispat Nigam Limited - India
- Sarangani Energy Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Central Java Power - Indonesia
- Malabar Cements Ltd - India
- Maheswari Brothers Coal Limited - India
- Grasim Industreis Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Posco Energy - South Korea
- Samtan Co., Ltd - South Korea
- Electricity Generating Authority of Thailand
- TeaM Sual Corporation - Philippines
- Vizag Seaport Private Limited - India
- Makarim & Taira - Indonesia
- New Zealand Coal & Carbon
- Salva Resources Pvt Ltd - India
- Renaissance Capital - South Africa
- SN Aboitiz Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Simpson Spence & Young - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Kapuas Tunggal Persada - Indonesia
- Borneo Indobara - Indonesia
- Vedanta Resources Plc - India
- Intertek Mineral Services - Indonesia
- Power Finance Corporation Ltd., India
- PetroVietnam Power Coal Import and Supply Company
- The State Trading Corporation of India Ltd
- Sree Jayajothi Cements Limited - India
- Global Business Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Energy Link Ltd, New Zealand
- Toyota Tsusho Corporation, Japan
- OPG Power Generation Pvt Ltd - India
- Meralco Power Generation, Philippines
- Kaltim Prima Coal - Indonesia
- Mercator Lines Limited - India
- Trasteel International SA, Italy
- Coal and Oil Company - UAE
- Iligan Light & Power Inc, Philippines
- Agrawal Coal Company - India
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